Telco M1 lifted its second-quarter net profit - thanks to better sales of mobile data - but lower handset numbers took off some of the gloss.
Earnings came in at $43.9 million for the three months to June 30, 12 per cent higher than the same period a year ago, but turnover dipped 2 per cent to $239 million.
The telco said this was due mainly to reduced sales of handsets and a fall in revenue from international calls.
The lower handset sales partly led to a 19 per cent drop in post-paid customer acquisition costs, to $268 million.
Chief executive Karen Kooi said the reluctance to buy handsets could be due to customers holding out for the next iPhone.
Handset subsidies are also not applicable to customers on its SurfShare supplementary plan, launched in February, which allows the sharing of data, talktime and message quotas with users on the main plan.
"A mature market (like Singapore) does not need high handset subsidies," said Ms Kooi.
M1's total mobile customer base dipped to two million, as at the end of June, mainly because of a loss of 111,000 prepaid customers from the first quarter.
Its post-paid customers had stood at 1.14 million and its prepaid base at 855,000, and the drop was due to a law in April that allows consumers to have only three prepaid phone SIM cards at a time, down from 10 previously.
About 58 per cent of its post-paid customers were on tiered data plans that come with smaller data allowances. The proportion of customers who exceeded their monthly data cap was 20 per cent, up from 16 per cent in the first quarter.
The company added 4,000 more fibre broadband customers from the first quarter, bringing the total number to 94,000.
M1 now qualifies to receive cross-carriage pay-TV content such as Barclays Premier League football and World Cup matches. It is applying for a TV broadcast licence.
Earnings per share for the quarter was 4.7 cents, up from 4.3 cents in the previous year.
This article was first published on July 22, 2014.
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